Skilled nursing facilities are set to receive a 4% increase in Medicare reimbursements in fiscal 2024 under a final rule the Centers for Medicare and Medicaid Services issued Monday.
CMS proposed a 3.7% increase in a draft regulation published in April. The final payment policy reflects a 3% market basket update plus a 3.6% increase to correct prior forecast errors, and minus a 0.2% productivity adjustment and a 2.3% reduction from clawbacks related to the implementation of the Patient Driven Payment Model.
The final rule also includes modifications to quality reporting for skilling nursing facilities. Nursing homes that do not meet reporting requirements are subject to a 2-percentage-point payment penalty.
The regulation requires that facilities submit quality and standardized resident assessment information using the minimum data set in at least 90% of reports starting in fiscal 2026, or face payment penalties. In addition, nursing homes will begin reporting the Nursing Staff Turnover Measure, with payment penalties starting in fiscal 2026. The final rule adds measures of hospitalization rates of long-stay residents and falls with major injuries to the quality reporting program.
CMS also adopted a health equity measure. Nursing homes with resident populations that are at least 20% dually eligible for Medicare and Medicaid can quality for payment bonuses based on equity metrics.
The regulation also requires nursing homes to report the percentage of healthcare workers and residents who are up-to-date with COVID-19 vaccinations beginning with fiscal 2025 and 2026 quality reporting programs, respectively, in accordance with Centers for Disease Control and Prevention guidance.
The final rule does not include the highly anticipated minimum staffing rule. That proposal, originally promised for this spring and vehemently opposed by industry, remains under review by the White House Office of Management and Budget.
Nursing home companies and trade associations flooded CMS with comments since the agency released the proposed rule urging a larger reimbursement hike, citing inflation, rising labor costs and the anticipated effects of the looming staffing mandate.
The American Health Care Association welcomed the rate increase while describing it as inadequate. “We appreciate that CMS recognizes the severe challenges and increasing costs nursing home providers face—from an unprecedented workforce shortage to record inflation in recent years. This Medicare increase will help nursing homes enhance their services and support their caregivers,” Senior Vice President of Reimbursement Policy Martin Allen said in a news release.
“However, more must be done to invest in our nation’s nursing homes, especially if the administration implements a federal staffing mandate, which could cost tens of billions of dollars each year. It is vital to fund government mandates and to ensure Medicare remains a viable program to ensure our nation’s seniors can access the care they need,” Allen said.
LeadingAge, which represents nonprofit nursing homes, made similar observations. “The 4% provided in this rule will surely be offset by the increasing costs of care, which will most certainly continue to rise in the coming year—on top of the expected staffing standards,” President and CEO Katie Smith Sloan said in a news release. The association also expressed concern that the COVID-19 vaccination provisions may violate the rights of employees and residents to opt out.
